14 September 2007


The US has several outstanding complaints against China before the World Trade Organization.

In conjunction with Mexico, the US has complained for example that China is providing illegal subsidies to its paper industry. Separately, the US claims a failure on China's part to protect intellectual property rights, and has joined with the European Union to object to China's tax system which effectively blocks the import of foreign-made auto parts.

Some of this is simply political cover. The administration wants to be able to make the case that its addressing the trade imbalance. The fact, though, is that the imbalance has macro causes and the WTO offers only micro solutions.

"So what is a solution" you might ask. I don't know that there is one, certainly not on a bilateral basis. To use an example I've picked up from George Will: I have a grave trade imbalance with my barber. I regularly pay him for a haircut and a shave, and he never buys anything from me - because he has no need of a writer.

The trick is to be in balance over-all. If my writing -- or Mr. Wills' -- brings either of us enough income to buy haircuts and everything else we want to buy, we needn't worry about bilateral balances.

Unfortunately, the US isn't in that situation either. We have an over-all trade deficit, and have had one for a long time. It amounted to $190 billion dollars more spent than received in the second quarter of 2007. That is worrisome.

Should I now act like a responsible citizen and propose something that can be done about it? Nah. I'm an anarchist, after all. An anarcho-capitalist, to be exact. Sovereignty is at the heart of the world's problems, and what to do about all of them is to free our minds from the grip of that premise.

Still ... such statistics do indicate to me that we in North America have a rocky road ahead of us and we continue to fall into debt buying the rest of the world's stuff. The bills will come due. And complaints to the WTO won't help us much.

No comments:

Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.